Governor’s Budget Advances Fiscal Responsibility But Structural Problems Remain

Earlier today, Governor Murphy unveiled his final budget proposal for Fiscal Year 2026. The proposal includes critical revenue-raising measures, such as an expanded fee on property sales over $1 million, but also cuts grant funding for programs that provide essential services to working families across the state. While Governor Murphy followed through on his commitment to fully funding public schools and pension obligations, the structural deficit remains over $1 billion with a surplus that would cover barely a month of government operations in the event of an economic downturn. In response, New Jersey Policy Perspective (NJPP) issues the following statement:

Nicole Rodriguez, President, NJPP:

“New Jersey’s state budget desperately needs new revenue to make health care, housing, and transit more affordable for working- and middle-class families while addressing the widening structural budget deficit. With federal funding cuts looming on the horizon, the Governor’s budget proposal takes an important step towards fiscal responsibility by increasing revenues through targeted measures like the expanded realty transfer fee while maintaining full funding for key commitments for public schools and pensions.

“However, even with these efforts, the budget still leaves the state vulnerable — failing to close the structural deficit or build a surplus ample enough to withstand federal cuts to critical programs like Medicaid. While families are struggling with basic costs, the proposed budget does not expand the Child Tax Credit or income assistance for working-class households, and it cuts back on grant funding for nonprofits and community programs. Yet, the budget finds room to fund StayNJ, an expensive homeowner subsidy program that would help wealthy households, even though it fails to meet the required fiscal responsibility guardrails set out in the original law.

“Rather than diverting funds from affordable housing and other essential services to fill budget holes, New Jersey needs more progressive, sustainable revenue solutions to build an equitable state for all residents — not one that forces cutbacks for the programs they rely on.”

Read NJPP’s latest budget analysis, What to Look for in the New Jersey Budget for Fiscal Year 2026.

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For the Many NJ on Governor Murphy’s Budget: Some Steps Forward, But Not Nearly Enough

“Governor Murphy’s final budget proposal acknowledges the need for new revenue, but it still falls short of the bold action required to fix New Jersey’s long-term fiscal challenges. While some new taxes and fees will help chip away at the deficit, they don’t go far enough—and some critical priorities remain underfunded.

“The Governor’s budget may have avoided the worst-case scenario, but let’s be clear: patchwork solutions won’t solve a structural deficit,” said Eric Benson, Campaign Director for For the Many NJ. “We can’t afford to just cross our fingers and hope for the best. Without real, sustainable revenue, we risk deeper cuts and greater instability in the years ahead.”

With billions of dollars in potential federal funding cuts looming, New Jersey needs a budget that truly invests in its future. The Legislature must take this opportunity to go further—because a budget that simply isn’t as bad as we feared is still not good enough.

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For The Many NJ is a statewide coalition of more than 40 organizations working to expand funding for essential services and improve budget practices to meet current and future needs, especially for communities that have been historically left behind.

For the Many: NJ Advocates Rally at Statehouse to Demand Tax Justice at the State and Federal Levels

Today, advocates from across New Jersey, joined by Senator Britnee Timberlake, rallied at the Statehouse to demand tax justice at the state and federal levels just a few days before Governor Phil Murphy’s final budget address.

As Murphy prepares to deliver his final budget address on Tuesday, February 25, advocates made clear that he faces a choice: balance the budget through cuts to programs and services that people rely on, or raise new revenue by targeting wealth and big corporations. Collectively, the coalition called for more taxes on the wealthy to make New Jersey more resilient to the chaos happening in Washington, DC, and allow the state to support and invest in working families who are feeling the pinch of rising costs.

“The federal government, right now, is saying to states, “If you don’t get on the same page as our agenda, we will cut your funding; we’ll roll it back. That’s why it’s important for the entire [NJ] legislature to make sure we’re filling gaps, so if the federal government wants to pull their support, we step forward and say, ‘Not here in NJ!’”, called New Jersey Senator Brittnee Timberlake. “We call on corporations to even step up and fill some of the funding gaps. We call for a hard look at the budget that Gov. Murphy is working on right now to make sure we’re filling some of the budget gaps that are coming out of or being created out of Washington’s nonsense.”

The rally also drew attention to looming federal threats, as Congress considers massive tax breaks for millionaires, billionaires, and wealthy corporations at the expense of Medicaid, SNAP, TANF, and other critical state funding streams that working families rely on. With $27.5 billion in federal expenditures flowing into New Jersey annually, the chaos in Washington, DC is creating significant uncertainty.

“We are seeing at the federal level what happens when the government serves billionaires and the wealthy instead of helping those who need it most. We can’t let that happen in New Jersey — our state budget needs more revenue to stop the cuts to critical programs like schools and bridges that people count on,” said Peter Chen, Senior Analyst, New Jersey Policy Perspective.

Today the coalition presented a united front, supporting a range of popular, proven revenue-raising solutions that target the ultra-wealthy and highly profitable corporations—not working families. These measures, which have strong public support, are key to creating a more resilient and just state budget.

“Our FY2026 budget must maintain funding for essential community and social safety net programs,” said Maura Collinsgru, Director of Policy and Advocacy for New Jersey Citizen Action. “New Jerseyans are struggling to keep pace with the rising costs of healthcare, child care, groceries, housing and other essentials. We must find ways to raise revenues to address any deficit issues rather than considering cuts to programs and services families depend on to make ends meet. That includes taxing the very wealthy and our most profitable corporations. We urge our state lawmakers to put the interests of New Jerseyans living paycheck-to-paycheck above tax relief for the very wealthy and politically connected.”

“Any cuts to state programs and services would put families like mine into crisis,” said Mercedes Morán, a community leader and member of Make the Road New Jersey. “I’m calling on Governor Murphy and New Jersey leaders to stand with working families like mine and make the wealthy pay what they owe. Let’s set an example for other states — while Congress considers the No Bailout for Sanctuary Cities Act, New Jersey needs to set an example and make it clear that we stand with working families.”

“For too long, we’ve been told to sacrifice more—work longer hours, pay higher taxes, stretch our families thinner. But when do they sacrifice? When do they pay their fair share?” said Trina Scordo, executive director of NJ Communities United. “We stand here—childcare workers, parents, and allies—to demand New Jersey tax millionaires and billionaires, and invest that revenue where it belongs: in us. This is our vision: A New Jersey where we fund dignity, not disparity. Where we unite, from cribs to communities, to demand a future that works for the many—not the few.”

“At a time when we are seeing so many federal cuts, it is incredibly important that as a state, we fully fund public healthcare, including the only public hospital in New Jersey, University Hospital in Newark,” said Debbie White, RN, HPAE President. “We know that the budget cuts by the new administration will benefit the wealthy at the expense of our most vulnerable populations. Our poor, our underserved and our under and uninsured populations need public health. We must protect the citizens of New Jersey by ensuring that our public health systems stay intact.”

“In this time of grave federal crisis of cuts, layoffs and a general dismantling of government, our New Jersey state legislators must have their priorities straight: now is not the time to continue favoring the already well-off! We demand tax justice so that we can overcome the federal threats,” said Dennis Trainor, Vice President CWA District 1.

“Instead of proposing a budget that fights for working-class New Jerseyans, Governor Murphy and Legislative Democrats are mimicking the Trump-Musk Administration playbook—gutting essential services and spending in every single town across the state,” said Ben Dziobek, Climate Revolution Action Network founding member and Executive Director. “Governor Murphy, is this the legacy you want to leave behind?—caving to corporate interests, draining critical funds, and stalling New Jersey’s future just to appease your wealthy friends?”

“Last month, New Jersey made national news when heavily armed ICE agents raided a large-scale employer in one of the most immigrant-rich neighborhoods in our state’s largest city. But you wouldn’t know it based on the committee agendas in Trenton,” said Amy Torres, Executive Director with New Jersey Alliance for Immigrant Justice. ”One in three workers in NJ’s essential infrastructure economy is an immigrant. Immigrant New Jerseyans pay over $3 billion in taxes each year with undocumented immigrants making up $1.3 billion in state and local taxes alone. Enough is enough. I refuse to let lawmakers talk about fiscal cliffs unless they tell us how they’re protecting our most precious resource- our people. Governor Murphy stood here just last month and said, ‘I will never back down from defending our New Jersey values — if and when they are tested.’ Well, now is the time. New Jersey must invest in immigrant legal services, language access, and legislation that defends our communities.”

Watch a recording of the press event here.

Download photos of the press event here.

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For The Many is a statewide coalition of more than 40 organizations working to expand funding for essential services and improve budget practices to meet current and future needs, especially for communities that have been historically left behind.

New Jersey Must Embrace an Educational Policy of Inclusion, Truth, Respect, and Academic Excellence

Yesterday, President Donald Trump signed three executive orders to direct federal agencies to “end indoctrination” in K-12 education, investigate campus protests, and enact a federal school choice voucher initiative. These orders seek to block federal funding for schools that affirm transgender students’ gender identity, censor the teaching of American history, specifically on race and slavery, and direct the Department of Education to prioritize school choice in discretionary grant programs. In response, New Jersey Policy Perspective (NJPP) released the following statement.

Mark Weber, NJPP, Special Analyst for Education Policy:

“This is a gross overreach of federal power and antithetical to the values that New Jersey aspires to uphold. The federal government has always had a limited role in K-12 education. The U.S. Constitution does not explicitly guarantee children the right to attend publicly-funded schools — but the New Jersey Constitution does.

“New Jersey has long been a leader in education and has made significant strides in expanding access to quality education for all students, regardless of their backgrounds. These executive orders would dismantle that progress by undermining protections for LGBTQ+ students, censoring discussions on race and history, and promoting policies that divert resources away from public schools.

“New Jersey aspires to affirm the dignity of every child, no matter their gender; to teach the truth about our state’s and our nation’s history, including the abuses and discrimination visited by many of our ancestors; and to protect the constitutional rights of its students and educators, including the rights to free speech and to peaceably assemble.

“Unlike private schools, New Jersey expects its public school districts to provide an adequate education for every student who comes to its doors, regardless of gender, race, ethnicity, religion, or immigration status. Public schools are the backbone of our economy and society, and policies that weaken them only deepen inequalities.

“The state’s education system hasn’t always lived up to the state’s ideals; NJPP has documented many of the challenges that remain, starting with a school funding system in need of immediate reform. But the Trump agenda of transphobia, school privatization, and whitewashing history is not compatible with the values that make New Jersey great. We urge all state leaders, educators, parents, and students to reject this administration’s blatantly unconstitutional orders and, instead, embrace an educational policy of inclusion, truth, respect, and academic excellence.”

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Murphy’s Words Shine But Shadows Remain

Today, Governor Phil Murphy delivered his seventh annual State of the State address, focusing on economic security and opportunity for all New Jerseyans in his final year as governor, ahead of a new federal administration. While the speech highlighted significant progress in creating a stronger, fairer economy for all, it missed critical opportunities to address the needs of New Jersey’s immigrant communities, bolster anti-poverty programs, and propose solutions for raising revenues to pay for vital public programs and services. In response to the address, New Jersey Policy Perspective (NJPP) released the following statement.

Nicole Rodriguez, President, NJPP:

“Governor Murphy’s address offered hope to many New Jersey families. His focus on financial security, universal pre-K, full-day kindergarten, paid parental leave for state employees, and clean energy initiatives reflects the forward-thinking leadership our state needs at this moment in history.

“However, the speech left critical issues unaddressed. Many New Jerseyans remain deeply concerned about the future under the Trump Administration, particularly as immigrant communities face the looming threats of mass deportation and family separation. Despite their vital contributions to the state’s economy and cultural fabric, these communities were notably absent from the governor’s agenda. They deserve strong and vocal advocacy from our leaders to ensure their safety and well-being.

“At the same time, the governor’s proposals on preserving access to health care, helping families afford groceries and rent, and meeting pension obligations reflect the state’s capacity to safeguard its residents. These initiatives are a step in the right direction, but they must be matched by a broader vision that includes all New Jerseyans.

“To truly meet the needs of its residents, New Jersey must ensure adequate funding for essential services like quality schools, reliable public transportation, and safety net programs. Achieving this requires bold, progressive tax reforms that equitably generate the revenue necessary to support these vital programs. We encourage lawmakers to prioritize these reforms, protect all families who rely on public services, and uphold the state’s commitment to justice and equity for everyone.”

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New Parole Proposal Would Reduce Prison Population, Promote Stability, and Improve Government Efficiency

Today, Governor Phil Murphy delivered his seventh annual State of the State address, where he announced new legislation that would reduce the number of people re-incarcerated for technical parole violations, which is when someone fails to meet the conditions of their parole rather than commits a new offense. An estimated 10 percent of the state’s prison population — or between 1,100 and 1,200 parolees — are in state custody for technical parole violations. In response to the announcement, New Jersey Policy Perspective (NJPP) released the following statement.

Marleina Ubel, Senior Policy Analyst, NJPP: 

This announcement marks a critical step toward building a more equitable and effective justice system in New Jersey. By reducing the number of individuals re-incarcerated for technical violations, this policy would address a key driver of unnecessary incarceration, promote stability for individuals reentering their communities, and improve government efficiency by significantly reducing the number of people entering the New Jersey Department of Corrections.

We look forward to hearing how this policy would extend relief to the over 1,000 people currently incarcerated for such violations. We commend the governor’s leadership in advancing this reform, which reflects a commitment to justice, fairness, and second chances.

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New Corporate Transit Fee Sets an Example of How We Can Fund Essential Infrastructure

Today, the New Jersey Legislature passed the appropriations act (S2025/A4700) for Fiscal Year 2025, sending the state budget to Governor Murphy’s desk. The budget includes the new Corporate Transit Fee, which dedicates approximately $1 billion to NJ Transit. The 2.5 percent fee only applies to corporations with more than $10 million in profits and will primarily be paid by out-of-state corporations like Amazon, Microsoft, and Walmart. The budget also includes New Jersey’s fourth consecutive full pension payment and increased school funding. In response to the new state budget advancing, New Jersey Policy Perspective (NJPP) issues the following statement.

Nicole Rodriguez, President, NJPP:

“Budgets are about choices, and this budget shows how we all benefit when lawmakers choose people over corporate profits. The new Corporate Transit Fee will literally save NJ Transit, getting the agency’s finances back on track and preventing harmful service cuts that would leave riders stranded. This sets an example of how we can fund essential infrastructure that we all rely on, and how anything is possible when profitable corporations contribute their fair share in taxes. Between the new dedicated funding for transit, robust school funding, and a full pension payment, the budget bill represents a vision for New Jersey where everyone has a fair shot, not just those with high salaries.

“But the work isn’t over if we want an economy that works for the many and not a select few. Maintaining these types of public investments will require more revenue, so state lawmakers will have to find new ways to ensure the wealth generated in New Jersey is reinvested right back into New Jersey, rather than sitting in the bank accounts of corporate executives and shareholders.”

Read NJPP’s analysis detailing which corporations would pay the Corporate Transit Fee.

Read NJPP’s report detailing the history of underfunding at NJ Transit.

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Film Tax Credit Expansion is a Bad Deal for New Jersey

Today the Assembly and Senate budget committees approved yet another expansion to the film and television tax credit program, making it easier for companies to receive credits and allowing film production studios to claim Pennsylvania workers as New Jersey film expenses. Despite overwhelming evidence that film tax credit programs offer pennies on the dollar in benefits for their costs to the state, this bill further loosens the strings on these credits. In response to this proposed legislation, New Jersey Policy Perspective and the American Economic Liberties Project issue the following statement.

Pat Garofalo, State and Local Policy Director, American Economic Liberties Project:

“The proposed changes to New Jersey’s expensive and wasteful film tax credit program make a bad deal even worse. Many of the film production jobs already go to transient workers from out-of-state. Now, this bill would let production companies claim out-of-state Pennsylvania workers — who pay Pennsylvania income taxes — as though they were New Jersey workers, further blunting any economic benefit to the state.”

Peter Chen, Senior Policy Analyst, NJPP:

“Diverting tax credits focused on affordable housing to profitable film production studios undermines their original intent and minimizes the public benefits. As each year passes, the film tax credit program continues to be a bad investment for New Jersey.”

For more information on the shortcomings of New Jersey’s film tax credit program, see NJPP and AELP’s joint analysis on film tax credit expansions.

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Rushed AI Tax Credit Bill Has High Cost, Few Safeguards

Today the legislative budget committees advanced a brand new $500 million tax credit package (A4558/S3432) for artificial intelligence (AI) businesses. These credits would not be required to go towards businesses in economically distressed areas nor would they include more than minimal safeguards against the substantial environmental costs associated with running AI systems. In response to the fast-tracked legislation advancing through committee, New Jersey Policy Perspective (NJPP) issues the following statement.

Peter Chen, Senior Policy Analyst, NJPP:

“Any program that costs this much should be carefully considered before it’s voted on, especially when we’re talking about subsidizing a new industry with major red flags. Artificial intelligence raises serious ethical and environmental concerns, and there’s little to no evidence that this field will create long-term jobs or economic growth for the state. This bill lacks safeguards to ensure it actually benefits New Jersey residents, and this rushed legislative process shuts down any chance to debate or even discuss the merits of the program.

“With the state facing a structural deficit, now is not the time to use public dollars to subsidize private profits in the tech industry.”

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New Corporate Transit Fee is a Historic Win for Riders

Today, New Jersey lawmakers introduced and advanced legislation (A4704/S3513) that creates a Corporate Transit Fee and dedicates the proceeds to NJ Transit. Sponsored by Senate President Nick Scutari and Assemblywoman Shama Haider, the legislation establishes the first-ever dedicated funding for NJ Transit in the 45-year history of the agency. The 2.5 percent fee on corporations with more than $10 million in profits would primarily be paid by large multinational corporations headquartered out of state. This follows months of education and advocacy from transit riders, unions, local elected officials, and advocates for a fair budget and reliable transit. In response to the bill advancing, New Jersey Policy Perspective (NJPP) issues the following statement.

Alex Ambrose, Policy Analyst, NJPP:

“This is a historic win for riders and the state of New Jersey as a whole. Until now, NJ Transit has never had a dedicated source of funding, and the new fee will help get the agency back on track after decades of disinvestment. For riders, more funding means more reliable service, and fewer delays and cancellations, and no major service cuts.

“No matter how you look at it, this is the textbook definition of good public policy. The state is making a major investment in a public service that millions of people use, with broad economic benefits, and it’s paid for by profitable corporations that can afford it. With riders about to pay higher fares, this fee makes sure that multinational companies like Amazon are also paying for the infrastructure they benefit from.”

“There are countless advocates, riders, local officials, labor leaders, and lawmakers past and present who made this possible. Thank you to Governor Murphy, legislative leadership, and bill sponsors for taking this historic step towards a more sustainable economic future.”

Read NJPP’s report on the need for dedicated funding for NJ Transit.

Read NJPP’s analysis detailing how most companies that would pay the Corporate Transit Fee are headquartered out-of-state.

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